Foreclosure Threatening Lenny Dykstra

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Foreclosure is threatening Lenny Dysktra now that he has dropped a lawsuit of $100 million against JPMorgan Chase for predatory lending. Chase has come to an understanding with a bankruptcy trustee to allow it to foreclose on the former baseball player’s mansion in California.

Dysktra had charged Washington Mutual (now in the hands of JPMorgan) for falsely persuading him to borrow more than his affordability limits. He was made to purchase Thousand Oaks for $17.4 million from hockey player Wayne Gretzky. But later he was not permitted to refinance.

As per the agreement JPMorgan has to pay $400,000 to Dysktra’s estate and surrender its claim on interest amounting to about $500,000. In exchange for this the trustee, liquidating the estate of Dykstra would allow JPMorgan to “proceed with it applicable remedies under state law to foreclose”. The property in question comprises of six bedrooms and eight bathrooms. The bank has to be paid $92,000 from the insurance proceeds to clean up the rubbish strewn all over the estate.

Lawyer Arturo Cisneros representing the trustee said, “The trustee and the lender believe that any litigation concerning the loan and/or the property would likely be time-consuming, factually complex and expensive.

About $13 million is owed to JPMorgan for the loan on the home according to court records. The sale price of the home currently is $14.9 million.

It is not clear as to why the lawsuit was dropped by Dysktra just after nine days. The dismissal was filed in Manhattan federal court. The agreement with JPMorgan was disclosed on 23rd March – it being filed in a bankruptcy court in California.

Tom Kelly of JPMorgan declined to make any comments. A lawyer from New York representing Dykstra chose to remain silent for the time being.

California court was urged by Cisneros to reject Dysktra’s bid to dismiss the Chapter 7 bankruptcy case as there was no evidence to show that the debtor had the ability to repay the money owed to the creditors ($43.7 million) outside the bankruptcy. The trustee argued that Dysktra had not acted to the best interests of the creditors. He pointed out that the player had pawned the rings of World Series and All-Star just prior to his bankruptcy for much less than its real worth.

Dysktra had charged that Cisneros was “only interested in dumping assets as quickly as possible.”

Dystra had retired from baseball in 1996 after a career running into 12 years.

Original Post:  Foreclosure Threatening Lenny Dykstra